Key Points

• When you’re laid off later in life, it can be tricky to find a new job.

• If you’re at least 62, claiming Social Security is an option you can look at for income.

• Before you sign up for benefits, figure out what other financial options you have.

• The $23,760 Social Security bonus most retirees completely overlook ›

Today’s economy is a funny one. If you look at unemployment data, things seem good. But if you talk to actual people who are looking for work, you might get a very different answer.

Losing a job can be a blow at any age. But getting laid off in your 60s can be extremely problematic if you’re not ready to bring your career to a close.

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Older workers often struggle to get hired because employers commonly don’t want to take a chance on people they think are on the cusp of retirement. So if you’re laid off in your 60s, there’s unfortunately a good chance that you’ll end up being out of work for a fairly long stretch of time.

Depending on your exact age, you may have the option to claim Social Security following a layoff in your 60s. But should you? That depends. And you should ask yourself these questions to find out.

1. Have I reached full retirement age?

You can claim Social Security at any point once you turn 62. But if you haven’t reached full retirement age, which is 67 for people born in 1960 or later, you’ll face a permanent reduction to your monthly benefits by signing up for Social Security.

Before you rush to take benefits, figure out how far away from full retirement age you are. It may be possible to cobble together an income for a period of time so you can wait to file for benefits and avoid a lifelong reduction.

2. How long will my severance and unemployment last?

Generally, people who lose a job through no fault of their own are entitled to unemployment benefits. Those might only replace a small portion of your paycheck. But if you’re also entitled to severance, it means you could be in line for a pretty nice payday upon your departure. And that could make it possible to hold off on claiming Social Security so you can lock in larger monthly benefits.

Every company’s approach to severance is different. But some employers calculate it based on tenure.

Let’s say your company is downsizing staff and offering everyone three months of severance pay plus an extra week per year of service. If you’ve been with your company for 20 years, that’s an additional five months of income on top of your company’s base offer. That buys you a good amount of time before you have to claim Social Security, especially when you factor in the added income from unemployment benefits.

3. Am I ready to be done working?

If you’re laid off in your 60s, you may decide to use it as an opportunity to retire on the spot. But maybe that’s not what you want, and you’re eager to continue working — if not full-time, then at least on a part-time or consulting basis.

It’s important to figure out what you want to do before claiming Social Security. Waiting to take benefits could be advantageous to your long-term finances. So if you’re willing to work, and to accept any old job to stay in the labor force for an extra year or two, that could allow you to sit tight on Social Security and snag larger benefits.

It’s never easy getting laid off, especially if it happens when you’re older. Claiming Social Security may be something you’re inclined to do right away. And depending on your exact age and financial situation, that’s not necessarily a poor choice. The point, rather, is to consider your different options before rushing to file for benefits immediately following a layoff.

The $23,760 Social Security bonus most retirees completely overlook

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